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Tretyakov was taught at home. In the first half of 1850 he inherited his father's business and built up a profitable trade in flax, linen processing and the sale of textiles.

Together with other Moscow businessmen he acted as the founder of the Moscow merchant bank (becoming one of its heads), the Moscow commercial and industrial company, some other large firms. He amassed a considerable fortune (4.4 million rubles), consisting of real estate (5 houses in Moscow), securities, money and bills.

Tretyakov started to collect art in 1854 at the age of 22; his first purchase was 10 canvases by Old Dutch masters. He laid down for himself the aim of creating a Russian National Gallery. In his collection Tretyakov included the most valuable and remarkable products, first of all the contemporaries, from 1870 - mainly members of the society of circulating art exhibitions (Tovarishchestvo peredvizhnyh hudozhestvennyh vystavok or Peredvizhniki, Передвижники in Russian). He bought paintings at exhibitions and directly from artists' studios, sometimes he bought the whole series: in 1874 he acquired V.V. Vereschagin's "Turkestan series" (13 pictures, 133 figures and 81 studies), in 1880 - his "Indian series" (78 studies). In his collection there were over 80 studies by Alexander Ivanov. In 1885 Tretyakov bought 102 studies by V.D. Polenov painted by the artist during journeys across Turkey, Egypt, Syria and Palestine. He got also acquired Vasnetsov’s collection of the sketches made during work above lists in the KievSt Volodymyr's Cathedral. Tretyakov had the fullest collection of such artists as: V.G. Perov, I.N. Kramskoi, Ilya Repin, Vasily Surikov, I.I. Levitan, and Valentin Serov. Aspiring to show the beginnings and development of the domestic school of art , Tretyakov began to acquire pictures by masters of the 18th and first half of the 19th centuries and landmarks of Old Russian painting. He also conceived the creation of a "Russian pantheon" - a portrait gallery of famous Russians. He commissioned especially for it portraits of figures of domestic culture from leading masters of this genre - N.N. Ge, Kramskoi, N.V. Nevrev, Perov, Repin.

In 1870-80 Tretyakov also began to collect illustrations (471 by 1893), since 1890 he formed a collection of icons. During his lifetime they were not included in an exhibition, being kept in the owner's study. He also collected sculpture, however this part of his collection was small (9 sculptures by 1893).

At first the gallery was located in Tretyakov’s house in Lavrushenski pereulok. But as his collection expanded he decided to reconstruct his house for his collection. In 1870-1880 the house was repeatedly reconstructed by the architect Kaminski.

Tretyakov wanted to transfer the gallery to the city as discreetly as possible, without any noise; he didn’t want to be in the center of general attention and an object of gratitude. But it was not possible to do it and he was very dissatisfied.

From 1881 his gallery became popular (by 1885 it was visited by about 30 thousand people). In 1892 Tretyakov inherited a collection of Western European painting from his brother and placed it in two halls of the western school. The collection in Tretyakov’s gallery was equal in importance with the largest museums in Russia at that time, and became one of sights of Moscow. In August 1892 Tretyakov donated his collection and a private residence to Moscow. By then in the collection there were 1287 picturesque and 518 graphic products of Russian school, 75 pictures and 8 figures of the West-European school, 15 sculptures and collections of icons.

On August 15, 1893 the official opening of a museum under the name "Pavel and Sergey Tretyakov City art gallery" (nowadays Tretyakov Gallery) took place. By 1890 it was visited by up to 150 thousand people annually. Tretyakov continued to fill up his collection, for example, in 1894 he donated a gallery of 30 pictures, 12 figures and a marble statue “The Christian martyrs“ works by M.M. Antokolski. He was engaged in studying the collection, and from 1893 issued its catalogue.

Apart from engaging in collecting, Tretyakov was active in charity. Charity for him was as natural as the creation of a national gallery.

Tretyakov consisted the honorary member of the Society of fans of applied arts and the Musical society from the date of their basis, granted the solid sums, supporting all educational undertakings. He took part in set of charitable certificates, all donations in the help to families of victims the soldier during the Crimean and Russo-Turkish War. Tretyakov's grants were established in commercial schools - by Moscow and Alexandrovskoe. He never refused in the monetary help to artists and the other applicants, carefully cared of monetary business of painters who without fear entrusted to him their savings. Pavel Mikhailovich repeatedly lent money to the kind counselor and adviser I.N. Kramskoi, V.G. Khudyakov, K.A. Trutovski, M.K. Klodt and much helped disinterestedly to others. Brothers - Pavel and Sergey Tretyakov - based in Moscow Arnoldo-Tretyakov School for deaf-mutes. Guardianship above the school, beginning in 1860th, proceeded during P.M. Tretyakov's life and after his death.

In his will Tretyakov provided large sums for school of deaf-mutes. For pupils of school Tretyakov bought the big stone house with a garden. 150 boys and girls lived in this house. Here they were brought up to 16 year old and left receiving profession in this school. Tretyakov selected the best teachers, got acquainted with the methods of studying.

Pavel Tretyakov bequeathed half of his estate to charitable purposes: on the device of a shelter for widows, juvenile children and unmarried daughters of died artists, and also on financing of gallery.